Wine Retailers & CA Consumers Get Bent Over…By Wineries

Posted by Tom Wark on Aug 29, 2005

There have been quite a few articles recently about a soon to be signed California law that allows any winery to ship to California and all California wineries to ship to other states that allow direct shipping to consumers. It’s California State Senator Wes Chesbro who authored the law and it is being hailed as a boon for California wineries and California consumers.

Yet, in reality it is a complete and total dissing of California’s wine retailers who aren’t provided the same privileges under the new law. How could this be? Thank the California wholesalers and California wineries, the former for their self preservation efforts and the latter for their disdain for a sector of the wine industry that did relatively little to help in the direct shipping battle of the past decade.

That said, I’m always interested in the legal rationale for a good screwing of a particular group. In this case the rationale used to not include retailers under the new law comes from Chesbro’s office in this form as related by the Napa Register:

"As Chesbro sought to bring California into compliance with the (recent Supreme Court) decision, he argued for leaving wine retailers under the old reciprocal law. This was appropriate because the Supreme Court decision mentioned only wineries, Kernan (Chesbro’s press Secretary) said."

I need some one to show me where in the Supreme Court decision’s use of the Constitution and precedent and legal reasoning there is no reason to believe that retailers too should not be discriminated against and thereby covered by the decision.

Someone? Anyone?

No in fact there is no way to make that argument without also relying on political calculations. To rely once again on the Napa Register article:

"One can easily say that if it’s discriminatory for the wineries, it’s not a stretch to say that it’s discriminatory to retailers," said Mike Falasco, a spokesman for the Wine Institute, the lobbying arm for California’s wineries."

Indeed! So my question is, why didn’t the Wine Institute insist that retailers be included in the new law? Why didn’t Family Winemakers of California insist retailers be included in the new law?

Payback. It’s a fact that retailers have, as an industry, sat on the fence throughout the direct shipping battles, some liking the opportunities that come with direct shipment, others fearful of the competition that comes with wineries shipping direct.

Then of course there are the wholesalers who surely insisted that the State be "conservative" in its interpretation of the Supreme Court decision.

The new law is nothing short of a political fiasco and a brilliant display of purchased political power, political payback, the consequences of shortsightedness and really bad lawmaking.